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First video of liberated Kirkuk

Iraqi forces continue to re-establish control over northern regions, while facing little or no resistance from Kurdish militants.

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Kirkuk and its vast oil fields are now officially back under Iraqi control after years of illegal rule, first by the illegitimate ISIS terror group and since 2014 by unauthorised Kurdish militants. As Kirkuk falls outside of the constitutionally designated autonomous Kurdish regions of northern Iraq, there was never any legitimacy for the Kurdish regime’s rule.

Video has emerged of Iraqi troops entering the city centre where they faced no resistance from fleeing Kurdish Peshmerga militants.

Another video shows local Iraqis welcoming the troops as well as the Popular Mobilisation Forces (PMF) who have aided Iraqi regulars throughout the long battle against ISIS.

As I reported yesterday in the The Duran, this is significant as the majority Sunni population of Kirkuk has welcomed both a majority Shi’a Iraqi army as well as entirely Shi’a PMF forces:

“The Iraqi government claims to now be in full control of Kirkuk after taking the city centre and surrounding areas. Hours ago, Iraqi forces re-established control over the main city administration building as Kurdish Peshmerga have begun a mass retreat.

Iraq’s position, which is in keeping with Iraqi and international laws, is that troops were sent in to re-establish formal control over a city that was previously occupied by ISIS, and since around 2014, has been partly in the hands of Kurdish militants and self-proclaimed political leaders. Crucially, Kirkuk falls outside of areas designated as autonomous Kurdish regions, even though the Kurdish regime in Erbil attempted to claim Kirkuk by placing it on the map of a would be Kurdish statelet, as part of the 25 September secession referendum. This provocative move was among Iraq’s gravest grievance against Erbil during the course of the referendum.

Earlier, Kurdish media released a statement from the Peshmerga stating that Iraq will pay a “heavy price” for what it described as a “flagrant declaration of war”. However, it is theoretically impossible for Iraq to declare war on forces whose very existence in Iraq is conditional upon the previously agreed autonomous status for Kurdish areas, in accordance with the 2005 Iraqi constitution. These areas and in the case of Kirkuk, an important city beyond, have been thrown into chaos due to the unilateral secessionist referendum which was boycotted by Arabs and Turkomen who overwhelmingly support Baghdad.

Prior to the 25 September referendum, Iraqi Kurds enjoyed levels of regional autonomy that are unique in the context not only of the Middle East, but of most of the world. Even many Kurdish sympathisers are beginning to blame Iraqi Kurdish leader Masoud Barzani for overplaying his hand by holding a provocative referendum that was condemned by every major world and regional power with the notable exception of Israel.

With Peshmerga forces rapidly retreating and with no real chance for Israel to supply Iraqi Kurds without a massive military operation that would incur the wrath of the wider region, including and especially Turkey, the Kurds in Iraq are now effectively as materially isolated as Turkish President Erdogan warned that they would be, should they continue their provocative post-referendum stance.

The only other conceivable scenario is for the US to supply Iraqi Kurds from their bases in Iraq. This however would mean that the US would effectively be declaring war on Iraq. As I previously discussed, there is every possibility that the US is covertly hoping that a Kurdish insurrection in Iraq provokes a wider conflict that the ISIS insurgency would effectively draw Iran deeper into Iraq, making Iranian forces subject to attacks from US proxies or even US forces themselves. There is little doubt in my mind that such a scenario has already been put into action. However, today’s events mean that these scheme may have failed before it even had a chance to be fully realised.

Given how rapidly Iraqi troops have been advancing, taking seemingly all of Kirkuk after a surge which begun approximately 24 hours ago, even a superpower as brazen as the US is running out of options. This is especially true as the Turkish President has yet again reiterated his commitment to secure northern Iraq with the cooperation of Baghdad, a promise whose seriousness is only enhanced by the fact that recent reports have indicated the presence of PKK activity in Kurdish regions of Iraq.

Unless the US wars to destroy what remains of its relationship with Baghdad while also fighting both Turkey and Iran, there are fewer and fewer options for America’s would-be proxy war against Iran.

After years of division, Iraq is unifying around support for the operations in Kirkuk and so too is the region ever more united behind the legal Iraqi position. What’s more is that words like “war” and “aggression” and worse yet, talk of retaliation, is only coming out of Kurdish propaganda outlets. Iraq continues to calmly state that it is merely re-establishing control of an Iraqi city. Iraq’s Prime Minister has further stated that troops have been told not to fire upon Kurdish Peshmerga militants, although of course they have and apparently are exercising the right to fight back in instances when Peshmerga are not in full retreat.

As was the case in respect of the secession referendum, both Russia and the US have stated that they condemn all violence, but that both view the recent clashes as an unfortunate incident rather than a larger or more profound existential crisis. To put it another way, both the Russian Foreign Ministry and the US Department of State are being highly diplomatic. In Russia’s case, this is standard procedure. In respect of the United States, I personally suspect it is a matter of keeping one’s cards close to one’s chest.

The Kurdish regime in Erbil as well as its known and supine puppeteers have seemingly bitten off more than they can chew. Furthermore, with Peshmerga forces retreating en masse, reports from recent years, stating that the Peshmerga reached covert agreements with ISIS to relinquish control of certain parts of northern Iraq, rather than engaging one another on the battlefield, now seem eerily believable. In trying to create a clean break from Iraq, the Kurdish regime is instead airing some very dirty laundry, all while taking major steps back from its previously comfortable autonomous status quo which is now in jeopardy due to the actions of Masoud Barzani”.

BREAKING: Iraq claims full control of Kirkuk

Now that international observers have confirmed Iraq has regained full control of the region, what is most apparent is the fragmented nature of the Kurdish militias. While most Kurdish fighters retreated or put up no resistance, others were goaded into fighting by angry local Kurds. This effectively shatters the myth of a united Kurdish regime in Iraq and has exposed the decades long political divisions among Iraqi Kurds as being as fractious today as they have been in the past.

With Turkey and Iran once again closing airspace over Kurdish regions of Iraq, creating a de-facto no-fly-zone with the permission of Baghdad, Russia has stated that it will evacuate its consulate in the de-facto Kurdish capital of Erbil, due to safety concerns.

Iraqi troops have further advanced to Sinjar, reclaiming another strategically important location from Kurdish forces who again, did not put up any significant fight.

Iraq’s advances represent a watershed moment in national unity as most factions in the country have united behind the common Iraq flag against an overzealous Kurdish regime led by the secessionist Masoud Barzani. This has been countered by the fractious nature of Kurdish parties, in spite of a propaganda campaign from Kurdish media which seeks to insinuate a sectarian conflict, blaming Iran and its Shi’a allies for an ‘attack’ on Kurds. This is effectively the opposite of what is actually occurring, but this narrative does fit the agenda of many in the US who seek to pivot their Middle Eastern strategy from using jihadist proxies to weaken Arab countries in the region (especially those allied with Iran) to one which seeks to use Kurdish proxies to do the same.

This however presents a unique set of problems for the US, as I explored in a previous piece, reproduced below:

“Statements coming from the Kurdish regime in Northern Iraq, which appear to reject recent overtures made by Iraq to negotiate a restoration of the automatons status quo in Kurdish regions in North Iraq, indicate that the Kurds are not acting alone in their provocations against Baghdad.

The following statements were Tweeted from Kurdish leaders in the aftermath of a recent visit of Iraq’s Parliamentary Speaker to Kurdish regions, which constituted Baghdad’s sincere attempt to de-escalate tensions. These statements appear to negate the atmosphere which as of last week, was tense but seemingly in the midst of a partial thaw.

There will not be any unilateral negotiation with Baghdad by either PUK or KDP. If there be any negotiation with Baghdad it will be a joint delegation representing all Kurdistan parties. KDP/PUK reject any demands to nullify the referendum results. Refuse preconditions

The Meeting in Dukan between KDP/ PUK ended. Good news on reiterating our national unity in the face of all pressure. Our readiness to reach peaceful resolution for current standoff in all area. Rejecting military option, but ready to defend.

 Over the last 48 hours, events have intensified in northern Iraq, as Iraqi forces have started to re-establish control over the city of Kirkuk, which was unilaterally claimed as part of a would-be Kurdish state by the regime in Erbil, during the unilateral secession referendum held on the 25th of September, 2017.

Iraq’s positions is that any act of Kurdish secession is illegal and furthermore, a serious security threat to the Iraqi state and wider region. Furthermore, Iraq will never recognise Kirkuk as part of a Kurdish autonomous region, nor will the local Arab and Turkomen populations of Kirkuk who have all rallied behind Iraq, in a unique display of inter-sect (Sunni and Shi’a) and inter-ethnic unity in Iraq.

As Turkish President Erdogan has correctly stated; with Baghdad, Tehran, Ankara and Damascus, all in opposition to Kurdish secession in northern Iraq, there is simply no way for a would-be Kurdish statelet in northern Iraq to logistically nor economically survive. With Iran, Turkey and Iraq threatening to embargo and effectively besiege such an entity, were it to be unilaterally proclaimed, the only hope for such a so-called “Kurdistan” would be if it had external support from a non-bordering state.

A quick examination of the states technically capable of and politically willing to supply such a Kurdish entity, while overcoming the military might of Iran and Turkey, quickly points to only one power. This is the United States. Both in terms of its technical might and its track record of defying all norms of diplomatic relations, Washington is uniquely placed to aid a would-be Kurdistan built on Iraqi soil, in defiance of the entire region, except for Israel, which would almost certainly continue to provide support for Iraqi Kurds, especially if doing so along with the US. Russia and China by contrast, have firmly committed themselves to the territorial unity of Iraq.

Even by American standards, Washington is caught between a rock and a hard place in respect of a would be Kurdish entity in Iraq. On the one hand, if the United States were to defy Baghdad, it would mean that Iraq would become ever more detached from the already pessimistic nature of its cooperation with the United States. Simultaneous to this, Baghdad would almost certainly move even closer to Iran in terms of security cooperation, economic cooperation and a broader geo-political alignment.

The danger is that, with Iraq still recovering from years of invasion, occupation and terrorism, that radical voices, such as that of the apparently influential, though unhinged Nikki Haley, would press for a US intervention on behalf of Israeli geo-political ambitions, in order to bolster Kurds in Iraq. This would constitute a new stage of the ongoing proxy war against Iran and one which would increasingly and inevitably also grow into a conflict with Turkey, in spite of Turkey’s continued, however grudging NATO membership.

As I wrote yesterday in The Duran:

“Iraq’s present geo-political position is that of the only country in the world where the two most influential countries inside its borders are the United States and Iran. To put this in perspective, imagine a country where the two most influential powers, each with its own troops working with various factions of such a state’s army, were Japan and North Korea.

But this is the awkward reality of modern Iraq, a country whose armed forces coordinate airstrikes with the USA and where in other parts of the country, on the same day, members of Iran’s Islamic Revolutionary Guard Corps, train Iraqi troops and Popular Mobilization Units  to fight terrorism. What’s more is that Iraq has recently approached Iran to sign a wide ranging military security pact. All the while, the US maintains multiple military bases in Iraq, in addition to an embassy in Baghdad that is better described as a military fortress.

If the US was intent on ‘containing’ Iran at all costs or even maintain a power in the Middle East with a track record of not being afraid of Iran, the US could have simply continued to fund and arm Saddam Hussein. In rejecting Saddam and engaging in illegal regime change, the US severely underestimated the potential of a post-Ba’athist Iraq not to devolve into a battle ground of identity politics, one in which sheer mathematics would dictate more pro-Iranian factions than any other.

Now, the US is stuck in the rut that is contemporary Iraq. On the one hand, Iraq has been a major material investment for the US. This is one of the leading explanations for why the US condemned the recent Kurdish secession referendum in northern Iraq. Where Iraqi Kurds were once the go-to faction in Iraq for the US to undermine the old Ba’athist government and since 2003, a faction that the US exploited to promote a so-called ‘Iraqi success story’, today, the US wants to have its Kurdish cake and eat it too. In other words, while the US does not intend to publicly defame Iraqi Kurds, they also seek to preserve the unity of their investment called Iraq.

At least, this is what the US says in public, but privately, this may have already changed. Kurdish secessionists in Iraq decided to include the oil rich Iraqi city of Kirkuk on the map of a would-be Kurdish state, as part of the widely condemned secession referendum process. This has infuriated the Arab and Turkomen population of Kirkuk who see Kurds as attempting to annex a city which is not part of the existing autonomous Kurdish region of Iraq.

Over the last 24 hours, reports from Kirkuk, detailing intense fighting between the Iraqi military and the Kurdish Peshmerga militia. have been flowing in, albeit under the radar due to the media focusing more acutely on Donald Trump’s anti-Iran speech. While most Arab sources describe the battles as being fought between Iraqi Troops and Peshmerga, Kurdish outlets speak of clashes between a “foreign backed Iraqi army” along with Shi’a forces versus Peshmerga.

Thus one sees that generally pro-western and clearly pro-Israel Kurdish writers are proliferating a narrative where a foreign power, meaning Iran, is backing Shi’a Iraqis in a fight against Kurds.

The clear intention is to send the world a false message the the current fights in Kirkuk are an Iranian proxy battle against ‘wholesome Iraqi Kurds’. In reality, when reading between the liens, even in Kurdish propaganda outlets, one realises that the majority Shi’a Iraq army, the Sunni Arabs and Sunni Turkomen of Kirkuk, are all united behind the Iraqi flag against the Kurdish flag. In this sense, a battle which Kurds are trying to paint as a proxy sectarian war, is actually a rare example of Iraqi unity between Arabs and Turkomen, Shi’a and Sunni.

Thus, one sees the blueprint as well as the folly of the US and Israel’s real proxy war against Iran. Having failed in Syria and Lebanon, Iraq is the place where anti-Iranian forces will continue and likely ramp up their long-term anti-Tehran proxy war.

Whereas ISIS failed to destroy Iraq and also failed to limit Iranian influence on Iraq, the Kurds in Iraq will likely be the next proxy force used to attempt and draw Iran into a new conflict in Iraq. In the coming weeks and months, the headlines in fake news outlets warning of an ‘Iran/Hezbollah plot to take over Syria’, will likely be replaced with stories of ‘Iranian terrorists committing atrocities against Iraqi Kurds’. Of course, the more this strategy fails on the battle field, the more absurd the fake news stories will get, just as fake stories about Syrian chemical weapons tend to appear every time Damascus scores a substantial victory against al-Qaeda and ISIS.

The problem with the new plan for more proxy wars with Iran in Iraq, is that in the process, many Iraqi Arabs, as well as Iraqi Turkomen, may revive a pan-Iraqi identity in the process. Furthermore, if pro-Iranian Popular Mobilization Units in Iraq begin fighting for the rights of Sunni Arabs and Turkomen against Kurds, it could actually help to reconcile Iraqi Sunnis with Iraqi Shi’as.

This is the real game-plan against Iran and while it is a dangerous one, it ultimately will not be an effective one. In many ways, it may even be less effective than the attempt to use ISIS and other Takfiri groups to draw Iran into a losing war in the Arab world. Here, the opposite has happened, Iran has worked with legal state partners to cooperate and ultimately secure victory against Takfiri jihadists.

When and if the conflicts in Iraq finally end, the only question remaining will be: What to do with the deeply unpopular US bases in Iraq? There are only two options:

1. Perpetual stalemate

2. A 1975 Vietnam style withdrawal

The United States plans to end Iranian power in Iraq, but it is becoming increasingly likely that Iraq will instead be the graveyard of US hegemony. In many ways, it already is”.

The proxy-war against Iran is under way in Iraq and has just entered a new phase

In this sense, the ongoing Battle of Kirkuk is already a test of Iraqi unity versus that of Kurdish forces. This combined with Kurdish unwillingness to negotiate with a still surprisingly malleable Baghdad, would appear to indicate that the Kurds are biding their time and waiting to see if external support will come there way. Because of the vast American presence in Iraq, this ‘external’ support wouldn’t even be logistically difficult for the US, certainly not at first anyway.

Either the Kurds are once again hoping against hope and simply wishing for direct US assistance or they know something the rest of the world can only guess at. It is increasingly possible that the Kurds realise that contrary to US public statements in support of Iraq’s territorial unity, that a secret plan is being hatched to help Kurds secede from Iraq. In doing this, the US would also be hoping to drag Iran and Turkey into the Iraqi quagmire that was first authored by the US, Israel and Britain in 2003.

The entire scenario is dangerous beyond conventional belief, but it is looking ever more likely that such a storm may be brewing”.

While I still have few doubts that many in the US would like to use a Kurdish proxy war in Iraq to provoke and ideally weaken the Baghdad-Tehran alliance, the speed with which Iraqi troops have advanced in Kirkuk and nearby regions, indicates that such a strategy will not be as easy as some, including the overtly pro-Kurdish John McCain, may have suspected.

The US is currently maintaining an officially neutral stance on the Iraq-Kurdish militant clashes, for fear of alienating either side. However, with the Kurdish militants apparently failing to put up any meaningful fight, many in the US ought to be questioning the sheer logistical reliability of their would-be proxies in the continued US regional struggle against Iran. In this sense, the victory of Iraq and its allies, is a further sign that however much the US invests in the Middle East, it is local powers that are best placed to shape their own future. This is exactly what the Iraqis have accomplished in Kirkuk and nearby regions.

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FBI recommended Michael Flynn not have lawyer present during interview, did not warn of false statement consequences

Flynn is scheduled to be sentenced on Dec. 18.

Washington Examiner

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Via The Washington Examiner…


Former FBI Deputy Director Andrew McCabe, who arranged the bureau’s interview with then-national security adviser Michael Flynn at the White House on Jan. 24, 2017 — the interview that ultimately led to Flynn’s guilty plea on one count of making false statements — suggested Flynn not have a lawyer present at the session, according to newly-filed court documents. In addition, FBI officials, along with the two agents who interviewed Flynn, decided specifically not to warn him that there would be penalties for making false statements because the agents wanted to ensure that Flynn was “relaxed” during the session.

The new information, drawn from McCabe’s account of events plus the FBI agents’ writeup of the interview — the so-called 302 report — is contained in a sentencing memo filed Tuesday by Flynn’s defense team.

Citing McCabe’s account, the sentencing memo says that shortly after noon on Jan. 24 — the fourth day of the new Trump administration — McCabe called Flynn on a secure phone in Flynn’s West Wing office. The two men discussed business briefly and then McCabe said that he “felt that we needed to have two of our agents sit down” with Flynn to discuss Flynn’s talks with Russian officials during the presidential transition.

McCabe, by his own account, urged Flynn to talk to the agents alone, without a lawyer present. “I explained that I thought the quickest way to get this done was to have a conversation between [Flynn] and the agents only,” McCabe wrote. “I further stated that if LTG Flynn wished to include anyone else in the meeting, like the White House counsel for instance, that I would need to involve the Department of Justice. [Flynn] stated that this would not be necessary and agreed to meet with the agents without any additional participants.”

Within two hours, the agents were in Flynn’s office. According to the 302 report quoted in the Flynn sentencing document, the agents said Flynn was “relaxed and jocular” and offered the agents “a little tour” of his part of the White House.

“The agents did not provide Gen. Flynn with a warning of the penalties for making a false statement under 18 U.S.C. 1001 before, during, or after the interview,” the Flynn memo says. According to the 302, before the interview, McCabe and other FBI officials “decided the agents would not warn Flynn that it was a crime to lie during an FBI interview because they wanted Flynn to be relaxed, and they were concerned that giving the warnings might adversely affect the rapport.”

The agents had, of course, seen transcripts of Flynn’s wiretapped conversations with Russian then-ambassador Sergey Kislyak. “Before the interview, FBI officials had also decided that if ‘Flynn said he did not remember something they knew he said, they would use the exact words Flynn used … to try to refresh his recollection. If Flynn still would not confirm what he said … they would not confront him or talk him through it,'” the Flynn memo says, citing the FBI 302.

“One of the agents reported that Gen. Flynn was ‘unguarded’ during the interview and ‘clearly saw the FBI agents as allies,'” the Flynn memo says, again citing the 302.

Later in the memo, Flynn’s lawyers argue that the FBI treated Flynn differently from two other Trump-Russia figures who have pleaded guilty to and been sentenced for making false statements. One of them, Alexander Van der Zwaan, “was represented by counsel during the interview; he was interviewed at a time when there was a publicly disclosed, full-bore investigation regarding Russian interference in the 2016 election; and he was given a warning that it is a federal crime to lie during the interview,” according to the memo. The other, George Papadopoulos, “was specifically notified of the seriousness of the investigation…was warned that lying to investigators was a ‘federal offense’…had time to reflect on his answers…and met with the FBI the following month for a further set of interviews, accompanied by his counsel, and did not correct his false statements.”

The message of the sentencing memo is clear: Flynn, his lawyers suggest, was surprised, rushed, not warned of the context or seriousness of the questioning, and discouraged from having a lawyer present.

That is all the sentencing document contains about the interview itself. In a footnote, Flynn’s lawyers noted that the government did not object to the quotations from the FBI 302 report.

In one striking detail, footnotes in the Flynn memo say the 302 report cited was dated Aug. 22, 2017 — nearly seven months after the Flynn interview. It is not clear why the report would be written so long after the interview itself.

The brief excerpts from the 302 used in the Flynn defense memo will likely spur more requests from Congress to see the original FBI documents. Both House and Senate investigating committees have demanded that the Justice Department allow them to see the Flynn 302, but have so far been refused.

In the memo, Flynn’s lawyers say that he made a “serious error in judgment” in the interview. Citing Flynn’s distinguished 30-plus year record of service in the U.S. Army, they ask the judge to go along with special counsel Robert Mueller’s recommendation that Flynn be spared any time in prison.

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Macron offers crumbs to protestors in bid to save his globalist agenda (Video)

The Duran Quick Take: Episode 36.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Via Zerohedge


As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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